Informer

The Jungle Can Be Rough

John J. Shalam, founder and longtime boss of Hauppauge, N.Y. electronics maker Audiovox, is the latest business tycoon to assert publicly that he was tricked into thinking he could duck taxes on big capital gains. In a New York federal court he just sued, among others, accountancy KPMG, law firm Sidley Austin Brown & Wood and fired partner R.J. Ruble, defendants who in similar cases have denied liability. Shalam's claim: He paid $3.85 million for a strategy utilizing foreign currencies and bank loans to avoid taxes on a $50 million stock-sale gain in 2000, although defendants knew the feds would frown. Shalam, who with supervoting shares controls Audiovox, says he later paid $14 million in back taxes and interest. KPMG, which was also Audiovox's corporate auditor at the time, was replaced in 2003. Shalam's no-tax ploy included creation of something called Congo Ventures. --Janet Novack

Money Talks Louder Than Words

While Morgan Stanley head Philip J. Purcell fights for his job, his firm's 10-K filing spends six pages describing its four business segments--and ten pages listing legal proceedings enmeshing them. The roster includes allegations of fee-rigging and coercion on public offerings, tainted research, sleazy mutual fund and variable annuity sales practices, electricity-price manipulation, assisting misrepresentation of client financials and even shenanigans from a ten-year-old Indonesian bond deal. Morgan admits no wrongdoing but over time has paid out hundreds of millions in settlements. --Neil Weinberg and William P. Barrett

Unintended Consequences

Not quite 3,000 persons died in the attacks of Sept. 11, 2001, but a new study by Cornell professors figures another 1,200 died during the next year because the terror attacks prompted them to travel by car. The research by Garrick Blalock, Vrinda Kadiyali and Daniel Simon canvassed traffic statistics, accounted for weather and gas prices and calculated how many post-Sept. 11 car trips were by people who would have flown but feared flying or the inconvenience of added security. --Ira Carnahan

Look Out, Taco Bell

Qwest Communications, a Baby Bell, has filed a trademark-infringement lawsuit against Michele Yontef, a Tucson private investigator and telecom consultant, over her domain name ma-bell.com. Public trademark records show Qwest, which inherited shared rights to the trademark Bell, never registered "Ma Bell," which is Yontef's long-standing nickname. That she just filed her own trademark application was news to a Qwest lawyer when FORBES called. Qwest says Yontef is unfairly profiting off the "famous family" of Bell marks. --J.N. and W.P.B.

That's a Path We're Not Going to Take

On Charlie Rose's TV show ex-General Electric boss Jack Welch said Winning, his new book with new wife Suzy Welch, was better than his previous book, Jack: Straight from the Gut, with now-Fast Company editor John Byrne. Left unsaid: Straight sold 3 million copies. Welch tells FORBES he "misspoke," calling Byrne a "great collaborator." But Welch said he does favor Suzy, laughing, "Now why would I say that?" --David Whelan

Did Humans Pay Antidumping Penalty?

A Journal of Economic Behavior and Organization study suggests economics helped do in Neanderthals, the primitive beings who suddenly went extinct after 200,000 years. Professors Jason Shogren, Richard Horan and Erwin Bulte write that emerging rivals--early modern humans traveling widely--used a competitive advantage of division of labor and free trade that included acquiring raw materials and the era's latest hunting tools. Conclusion: "Economics might have been the only thing going for us in those early days." --Tomas Kellner and W.P.B.